Compaq Partners with Intel on Server Appliance Line

Compaq Computer Corp.,
seeking a foothold in the smaller, less-lucrative but rapidly growing server
appliance market, has become the second major OEM to announce that it will sell
Intel Corp.’s NetStructure line of
appliances.

Compaq will be a sales and distribution channel for the
NetStructure SSL, VPN and XML appliances, according to John Young, vice
president of the TaskSmart server line. The partnership, he says, “allows us to
enter into smaller categories for market size. We’ve made a pretty significant
investment in a number of server appliance categories, and this gives us a
nicely rounded portfolio.” Most of the appliances would fit into a Web farm or
Internet data center, Young believes.

Server appliances are small, single-function computers that
come pre-configured for a job. The SSL appliance, for example, would speed up
e-commerce servers by offloading the encryption tasks that eat up CPU cycles.
The SSL appliance would do encryption as its only function. Appliances are
usually inexpensive, can be quickly added to a farm, have basically no
configuration since software comes pre-installed, and are easy to maintain.

Hewlett-Packard Co.
announced last December that it was also selling NetStructure appliances, but
it is offering a broader range of the NetStructure line.

Originally, Intel had said it would sell its NetStructure
appliances through its own channels, bypassing traditional OEM partners like
Compaq and HP. Late last year, Intel reversed course and went back to their
traditional model, leading to speculation among analysts that it never intended
to sell the appliances on its own, but only wanted to increase visibility in
the server appliance space to enhance sales.

The appliances, available immediately, start at a street
price of $2,550. - Keith Ward